CP touts “turnaround” as 3Q earnings beat Street

Canadian Pacific Railway Ltd. Wednesday reported third-quarter earnings of C$224 million (US$226 million), or C$1.30 per diluted share, up 20% from C$187 million, or C$1.10 a share, it notched in the third quarter of 2011. That surpassed Wall Street consensus expectations of C$1.23 per share.

CP CEO E. Hunter Harrison said the results reflected the Class I railroad's efforts to improve efficiency since its Board of Directors was revamped following a proxy battle led by New York-based Pershing Square Capital Management. Pershing Square chose Harrison to succeed former CEO Fred Green.

"Momentum is building at Canadian Pacific," Mr. Harrison said in a statement. "We have implemented new services; closed terminals and certain yard operations; and we've put a new leadership team in place. The team has made significant progress on operational improvements, controlling costs and on delivering results. And this is just the beginning."

CP's operating ratio in the third quarter was 74.1%, down 170 basis points from the third quarter of 2011. Revenue rose 8% to C$1.5 billion. Automotive shipments saw the largest gains during the quarter, with revenue up 31% year over year, followed by Industrial and consumer products, which rose 24%.

Shares of CP were up almost 5%, at $92.84, in midmorning trading Wednesday on the New York Stock Exchange.